What Are Freight Forwarders?
A “freight forwarder” or “forwarder” or “forwarding agent” works as an important cog in the global supply chain. They range from an individual to a small company to massive enterprises, but their main service is to organize and transport goods from one destination to another. These destinations can be domestic or international with most freight forwarders capable of doing both.
Freight forwarders work as professionals in the logistics network in which they arrange carriers for shipments. These carriers transport cargo through land, ocean, or air depending on the destination. Because most freight forwarders offer international services, they are experts in preparing and processing the documents needed to clear customs. Customs clearance is a whole other topic to touch on, but if not done correctly, can cost you or your business a lot in demurrage & detention fees.
Where do Freight Forwarders Operate?
Freight forwarders can be found in almost every country and often operate locally, domestically, or internationally. This is important because, without freight forwarding agents, both the global and domestic supply chain would be very inefficient if not crippled. Hence, freight forwarders need to be able to continuously operate in all regions that require logistical support or a supply chain.
The International Federation of Freight Forwarders Association (FIATA) was established in 1926 as a non-governmental organization (NGO) to represent freight forwarders worldwide. Headquartered in Geneva, FIATA currently includes 109 members in over 150 countries. The organization works with the United Nations alongside many other nations to help establish standardized regulations and documents for use by all freight forwarders. Because freight forwarders are such global entities that play a huge role in logistics, the need for standardization is important for them to operate in different countries and regions.
Freight forwarders’ ability to organize air, land, and sea freights mean their ability to operate and arrange carriers is only limited by the partnerships they have. Even with this limitation, they can still reach out and connect with other freight forwarding companies to help arrange transportation to more distant destinations. So you should not be too concerned about your shipment not being able to reach a certain destination.
What Services Do Freight Forwarders Provide?
Freight forwarding services can range greatly depending on the company. The more common services that freight forwarding companies provide include air, land, or sea transport for your goods. Other services can include customs brokerage, transport of hazardous or sensitive goods, and temperature-controlled shipments. As mentioned earlier, customs clearance is a hassle, so having a freight forwarder take care of the documentation is a huge relief and can potentially save money as well.
The price of these transport services often depends on the goods being transported as well as freight rates between destinations. Certain destinations may also require a value-added tax (VAT) or goods and services tax (GST) on transported goods. Hence, it’s always good to ask for a quotation from the freight forwarding agent before arranging a transport service. At SFI, we provide a free quotation on all our freight services.
Why Should You Use a Freight Forwarder?
Now that you have a solid understanding of what freight forwarder is and where they operate, it’s time to know why you should consider using one. You know that freight forwarders are important to the global supply chain, but why does it matter? How does it affect you? Why should you care?
Save Time & Money
The answer is easy. Freight forwarders can save you and your business time and money without all the hassle. Since freight forwarders are logistic experts with broad experience and connections, they can oftentimes find or have preferred freight rates due to their partnerships or agreements with carrier companies. This means a good freight forwarding company can help you save on shipping costs through preferential rates.
Moreover, partnerships with carriers mean that freight forwarding companies are allowed to have a lot more flexibility and control with their shipments. You or your business can have a lot more choices in choosing when and where to ship your goods than if you do it yourself.
A final point to add is a freight forwarder’s expertise in clearing customs. Customs clearance requires a lot of documentation and specific periods to submit the said documents. Deadlines become important as well as accurate documentation. One wrong move and your shipment can be facing heavy delays as well as additional fees as your goods are stuck in ports. A freight forwarder can help prevent those issues because they deal with shipping and customs on a daily basis. Hopefully, for your next shipment, you contact a freight forwarding agent to help you with your shipping needs.